Question

Check m Required information Problem 5-2B Record transactions related to credit sales and contra revenues (LO5-1, 5-2) (The following information applies to the questions displayed below.) Data Recovery Services (DRS) specializes in data recovery from crashed hard drives. The price charged varies based on the extent of damage and the amount of data being recovered. DRS offers a 15% discount to students and faculty at educational institutions. Consider the following transactions during the month of June. June 10 Rashid's hard drive crashes and he sends it to DRS. June 12 After initial evaluation, DRS e-mails Rashid to let him know that full data recovery will cost $1,000. June 13 Rashid informs DRS that he would like them to recover the data and that he is a student at UCLA, qualifying him for a 158 educational discount and reducing the cost by $150 ( = $1,000 X 158). June 16 DRS performs the work and claims to be successful in recovering all data. DRS asks Rashid to pay within 30 days of today's date, offering a 48 discount for payment within 10 days. June 19 When Rashid receives the hard drive, he notices, that DRS did not successfully recover all data. Approximately 20% of the data has not been recovered and he informs DRS. June 20 DRS reduces the amount Rashid owes by 20%. June 30 Rashid pays the amount owed. < Prey 1 2 3 of 8 Next >

Answer 1

solution: DATA RECOVERY SERVICES Partial Income statement Total service revenues ($1,000-15%) Less: sales Allowances ($850X3011.). Net service revenue . . Amount (5) $850 $(255) 5545 1. 3) If Rashid had paid the bill on June 25: Net service revenues . = $571.2 ($595-($595*21.)) Explanations 3) IP. Rashid had paid the bill on June asli.e within 10 days) Who ales discount.is offered sales discount will be $23.8lie $5.95 Xll).

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